Save me from myself

[makloda]

Quote from DennisR:
I have pretty bad luck market-wise even if i don't trade like an idiot.

You have bad luck in Vegas, not in the financial markets. The markets are designed to give you what you deserve and what you ask for. You wanted to gamble for a "quick double" and you got caught with your pants down. Just take it for what it is.

You titled the thread "Save me from myself". If I was in your situation I'd close all positions into the open tomorrow, close your brokerage account and go back to the drawing board. Stop trading immediately, for the time being.

While you take a pause, come up with an exact trading plan when you re-open your account. Have a plan for each position BEFORE you enter. Don't fiddle and change opinion after you enter once it starts going against you. Don't ever start a position that - according to the exit plan - can cause you a maximum loss that wreaks havoc on your entire bankroll (e.g. a 50% total loss on your entire account from a single position). Make hard rules and stick with them, e.g. you allow no position to lose more than 5% of your entire account equity. In that case you immediately close out the position at a loss.

Diversify across multiple positions and ideally across multiple uncorrelated strategies (e.g. a long/short swing trading equity strategy and an iron condor equity index strategy just as two examples).

Good luck.

 

[bighog]

Wishing and hoping does not work in trading.............try singing it, Dusty did fine . http://www.youtube.com/watch?v=Fx50sc5B_eA&feature=related

 

[lescor]

I don't know what to tell you about the trade you're in, but if you are going to keep trading, memorize this advice and chant it reguarly until it's ingrained in your psyche.

The three goals of trading, in order of importance:

1. Protect your capital
2. Earn consistent returns
3. Earn large returns

Your situation describes what happens when you try to go directly to step three without mastering the first two, which is probably the most common newbie mistake.

Good luck

 

[RedRat]

Hi,

I would say that 10 DMA is a crap. All these well-known tech analysis indicators are crap. Really.

If something works for you since January it does not mean it is profitable. You MUST test your technique based on historical data - before you start trading again. Test it intensively, may be you will find another parameter, say 8 DMA is your solution (but that leads to curve-fitting).

The opposite is also true, if you have series of losses it does not mean your strategy is non-profitable. To be sure in your strategy you MUST be ensure it was profitable in the past.

There is a common saying like
Options traders eats like a chicken but defecate like elephants.

In your case you take a series of profits and you trust your strategy. But there is a cost of full disaster.

Go to the drawing board!
RR

 

[RL8093]

Quote from DennisR:

You're right that i don't know what i'm doing but can you honestly pick 2 worse times for a new trader to enter the market in the last decade?

As others have said or inferred, trading goes both directions and you should consider it a craft deserving of serious study. Another way to look at your statement is that you entered the market at two of the best times to make money:

- there were a lot of noobs in the mkt waiting to be fleeced
- volatility was fantastic

Traders dream about these conditions - not dread them! Best of luck with your trading education...

R

 

[kinggyppo]

Quote from DennisR:

I'm an idiot and i need advice. I'm a fairly new options trader (about a year). I was making good money selling iron condors on the indexes, but in Jan I almost wiped out my account. I re-evaluated my strategy and started trading the VIX almost exclusively. I made back all my money and then some. I know I have way too much risk but I've been making good money at work and decided i would take big risk to try and double up. After doubling (which i figured would be no prob lol) i would get way more conservative and protect my account.


This is strange to me as I have been trading options for years
and never traded the vix. Why are you trading the vix as opposed to GOOG options. I guess what I am saying is who trained you or are you self taught. You are probably trading too hot which makes blowup easy. You know what I mean. If its any consolation, you are paying your tuition to the market. You are not alone. How many deltas long are you?

 

[Mvic]

I don't know where to start...

When you put on a trade, especially something like an Iron Condor, do you have an exit strategy or do you just hope you won't need one? Think the whole trade through, not just the part when you get to ring the cash register and go and buy your Ferrari (or are you a Porsche man?)

Go back and start at the beginning and learn the components of trading before you lose a lot more money. You are a like a guy who has no experience riding a motorbike but has more money than sense so buys himself a Ducati Desmosedici to learn to ride, playing with fire.

As far as the trade you are currently in just cut your losses and exit the trade.

Sorry for being blunt but I think this phrase I saw somewhere encapsulates what you need to hear nicely "this is fuckin serious shit, it demands fuckin serious attention, and requires fuckin serious committment, anything less than that and you are seriously fucked!"

 

[DennisR]

Quote from kinggyppo:

Quote from DennisR:

I'm an idiot and i need advice. I'm a fairly new options trader (about a year). I was making good money selling iron condors on the indexes, but in Jan I almost wiped out my account. I re-evaluated my strategy and started trading the VIX almost exclusively. I made back all my money and then some. I know I have way too much risk but I've been making good money at work and decided i would take big risk to try and double up. After doubling (which i figured would be no prob lol) i would get way more conservative and protect my account.


This is strange to me as I have been trading options for years
and never traded the vix. Why are you trading the vix as opposed to GOOG options. I guess what I am saying is who trained you or are you self taught. You are probably trading too hot which makes blowup easy. You know what I mean. If its any consolation, you are paying your tuition to the market. You are not alone. How many deltas long are you?

Thanks for reply. I am self taught. I am definitely trading hot, but it was my plan to take big risks early. My position in jeopardy is 100 27.5 april calls, delta 853.12 I trade VIX due to liquidity in calls and large daily swings in option pricing.

 

[MandelbrotSet]

Quote from DennisR:

Thanks for reply. I am self taught. I am definitely trading hot, but it was my plan to take big risks early. My position in jeopardy is 100 27.5 april calls, delta 853.12 I trade VIX due to liquidity in calls and large daily swings in option pricing.

I don't trade options, but this is a fatal flaw, in your thinking and your trading plan.

If you think it through you will see why, but to succeed you will have to counteract your greed and desire and to incorporate the effect that time has on your returns.

Good trading.

 

[DennisR]

Quote from Mvic:

I don't know where to start...

When you put on a trade, especially something like an Iron Condor, do you have an exit strategy or do you just hope you won't need one? Think the whole trade through, not just the part when you get to ring the cash register and go and buy your Ferrari (or are you a Porsche man?)

Go back and start at the beginning and learn the components of trading before you lose a lot more money. You are a like a guy who has no experience riding a motorbike but has more money than sense so buys himself a Ducati Desmosedici to learn to ride, playing with fire.

As far as the trade you are currently in just cut your losses and exit the trade.

I had an iron condor strategy that was working nicely for about a year. 3:1 risk reward, 6 weeks out on an index, close out 1 week to expiration. My mistake was going all in because of how well it was working. I than got crushed in jan and hastily revised my whole strategy. I decided the market was too crazy and looked for the easiest thing i could scalp money from. Looked at a bunch of charts and picked the VIX. That started working great too and now same thing. I know the answer is better money management/less greed and i plan on sticking to that now. I just don't know what to do with my open position.